College Students Tracked by Debit Fees
Among the various personal finance tips, is that Debit cards have been recognized as new fee generators for the banks. This has reportedly, been the cause of more restrictions being placed on credit card promotions on campus, to combat this type of potential debt trap!
Questions are being asked, regarding how a bank and other financial institutions can be prevented from using their “plastic” to entice students into debt. In addition, to determine the reasons why some student loans, are connected to a card with high cost fees? Theses debt fees follow college students like an unwanted virus. In various personal finance tips, a warning is given that the attraction for students for a prepaid or debit card is the speed of obtaining financial aid, or student loan cash.
This lucrative market is being contested by Wayne State University and Higher One, jointly launching a credit card agreement, affecting 520 campuses across the nation. A “driving principle” of this operation, is stated to be that the students make the optional decisions!
There are four Higher One ATM’s located on Wayne State campus, with others on campuses in Southeastern Michigan. Students are able to withdraw money, at no charge from those machines. However, debt fees follow college students when campus card ATM’s run out of cash and they must use by another provider’s ATM. This could impose fees of $5, to gain access to the financial aid facility.
While the concept is regarded as being sound, it could be tested by how efficiently students can access funds without the need to pay extra fees at an ATM. There is also criticism regarding debt fees follow college students, by 50 cents swipe fees, created by the need to use PIN numbers with debit cards. The card, when used like a credit card, does not incur a fee. When used with a PIN number, there is a fee
A further contention related to personal finance tips, is that debit cards relating to student loans, provide an opt-in facility and not an opt-out. In addition, there should be a more effective disclosure of applicable fees, with averages based on previous year’s records.
Debt Fee’s follow college students, when those with Higher One cards, incur the “abandoned account fee,” This fee could be activated if no activity is detected for six months. The fee imposed, is $10 a month until the account reaches a zero balance. Higher One has stated that the fee would not place an account in overdraft. It is designed to create a zero balance in an abandoned account, to enable closure.
The United States Department of Education has held negotiated rule-making sessions regarding the regulations for debit cards with some members of Congress wanting to address the fees. Students should be encouraged to review various personal finance tips, to help them and their parents, choose the most beneficial finance providers.
It is now becoming crucial, for a method to be determined, whereby financial aid money and student loans will not be wasted on unnecessary fees and avoid a critical situation, where Debt Fee’s follow college students.